Hot search keywords

Bitcoin trading in yuan drops as new transaction fees by exchanges take effect

Following the commencement of the move to start charging transaction fees by China’s BTCC, OKcoin and Huobi on Tuesday January in response to PBoC’s requirement to eliminate margin trading service, Bitcoin trading volume in Chinese yuan has dropped to its lowest for the year.

According to Bitcoinity which provides Bitcoin market data across major exchanges and currencies in various parts of the world, trading volume in yuan dropped from its 90.3% market share to as low as 43.3% in less than 24-hours after the new fees came into effect.

The zero fees arrangement by these exchanges was seen as the main reason why more of Bitcoin trading in China was automated. Now that lesser trading volume is expected on a daily basis for the next few days, it is not clear for how long the situation will remain so or the extent to which the situation will decrease volatility level.

Btcvol.info puts the latest 30-day estimate of Bitcoin volatility index level against the US dollars at 5.21% as at the time of this writing while its volatility against gold averages around 1.2% but other major currencies average between 0.5% and 1.0% to gold.

A reduced level of volatility – the measure of how much the price of a financial asset varies over time – will make the cost of converting into and out of the digital currency decrease as well.

From the look of things, the situation does not really favour day traders and those who speculate on the price of Bitcoin. As a result, there will be less profit for traders to make as price movements slip and exchanges now operate straightforward business models being cautious of the peering eyes of the People’s Bank of China

Rather, the situation is good for the regular investor in Bitcoin who prefers to see the currency maintain a stable price in the market. The good side to this is that such stability due to less volatility and less speculation may lure new users into buying into Bitcoin.

On the other hand, it could be said that this situation that was made possible by the PBoC’s earlier moves, favours exchanges using USD as transactions based on this currency have risen to 39.6% of the market from about 1% at the start of year. Also, exchanges using EUR for transactions rose to about 13% from a previous 0.2% on January 1.

In general, PBoC’s somewhat recognition of Bitcoin trading and introduction of a regulatory compliance is good for the market as it provides some clarity to how the market operates which could improve investor confidence in the long term. It may also strengthen the view that the current situation will be bearish with time as there is a larger number of Bitcoin users – and potential users – who want its price to be stable to be a true alternative currency.

Olusegun Ogundeji is an author and journalist from Africa. He writes mainly on technology-related issues including Bitcoin/Blockchain - usually from an end user perspective.

COMMENTS(18)

2 years agofoladgoad

Bitcoin trading in yuan drops as new transaction fees by exchanges take effectFollowing the commencement of the move to start charging transaction fees by Chinas BTCC, OKcoin and Huobi on Tuesday January in response to PBoCs requirement to eliminate margin trading service, Bitcoin trading volume in Chinese yuan has dropped to its lowest for the year.According to Bitcoinity which provides Bitcoin market data across major exchanges and currencies in various parts of the world, trading volume in yuan dropped from its 90.3% market share to as low as 43.3% in less than 24-hours after the new fees came into effect.The zero fees arrangement by these exchanges was seen as the main reason why more of Bitcoin trading in China was automated. Now that lesser trading volume is expected on a daily basis for the next few days, it is not clear for how long the situation will remain so or the extent to which the situation will decrease volatility level.Btcvol.info puts the latest 30-day estimate of Bitcoin volatility index level against the US dollars at 5.21% as at the time of this writing while its volatility against gold averages around 1.2% but other major currencies average between 0.5% and 1.0% to gold.A reduced level of volatility  the measure of how much the price of a financial asset varies over time  will make the cost of converting into and out of the digital currency decrease as well.From the look of things, the situation does not really favour day traders and those who speculate on the price of Bitcoin. As a result, there will be less profit for traders to make as price movements slip and exchanges now operate straightforward business models being cautious of the peering eyes of the Peoples Bank of ChinaRather, the situation is good for the regular investor in Bitcoin who prefers to see the currency maintain a stable price in the market. The good side to this is that such stability due to less volatility and less speculation may lure new users into buying into Bitcoin.On the other hand, it could be said that this situation that was made possible by the PBoCs earlier moves, favours exchanges using USD as transactions based on this currency have risen to 39.6% of the market from about 1% at the start of year. Also, exchanges using EUR for transactions rose to about 13% from a previous 0.2% on January 1.In general, PBoCs somewhat recognition of Bitcoin trading and introduction of a regulatory compliance is good for the market as it provides some clarity to how the market operates which could improve investor confidence in the long term. It may also strengthen the view that the current situation will be bearish with time as there is a larger number of Bitcoin users  and potential users  who want its price to be stable to be a true alternative currency.http://news.8btc.com/bitcoin-trading-in-yuan-drops-as-new-transaction-fees-by-exchanges-take-effect

I can’t believe my eyes! I was expecting the volumes to drop significantly, but not this far. Current volumes;OKCoin – 18,100BTC ~ While it used to be far over 1,000,000BTCHuobi – 13,275BTC ~ While it used to be far over 1,000,000BTCBTCC – 12,465BTC ~ While it used to be far over 1,000,000BTCBitfinex – 11,410BTCKraken – 10,685BTCCNY was accounting for like 97% of the total trading volumes every day, and look at them now, it’s almost embarrassing… I wonder what these traders are doing now flash trading is officially not rewarding anymore, where they usually could benefit even from the slightest movements due to there being no fees involved. It’s a win for Bitcoin!

Quote from: 1Referee on January 25, 2017, 10:00:18 AM
I can’t believe my eyes! I was expecting the volumes to drop significantly, but not this far. Current volumes;OKCoin – 18,100BTC ~ While it used to be far over 1,000,000BTCHuobi – 13,275BTC ~ While it used to be far over 1,000,000BTCBTCC – 12,465BTC ~ While it used to be far over 1,000,000BTCBitfinex – 11,410BTCKraken – 10,685BTCCNY was accounting for like 97% of the total trading volumes every day, and look at them now, it’s almost embarrassing… I wonder what these traders are doing now flash trading is officially not rewarding anymore, where they usually could benefit even from the slightest movements due to there being no fees involved. It’s a win for Bitcoin!

It has a drastic effect on their volumes for sure. I even think that traders who were trading at Chinese exchanges only because of their zero fee structure, but are residing elsewhere in the world, will say good bye to China now there is no advantage anymore. I just wonder which exchange(s) will see a surge in their trading volumes due to these traders looking for a new place to trade.

It may also strengthen the view that the current situation will be bearish with time as there is a larger number of Bitcoin users  and potential users  who want its price to be stable to be a true alternative currency.

Quote from: Papa Bear on January 26, 2017, 04:14:57 AM
It may also strengthen the view that the current situation will be bearish with time as there is a larger number of Bitcoin users  and potential users  who want its price to be stable to be a true alternative currency.
If you have fake trade how could that be bearish?Bitcoin is the only truly limited “currency” by design.Its not like fiat were 80.000.000.000 is created out of nothing , every month in the EU for example.

Finally, after Chinese inspections Bitcoin will be more decentralized. Finally, we have new fee structure in China that could be bullish for Bitcoin price. As it was stated there are 3 resons for that: 1) the inability to short; 2) Real volume exposure; 3) less market manipulation.

I think that was a normal reaction to new transaction fees and probably for some time it will still have its effect. But in a week or two I’m sure Bitcoin trading volume in yuan will go back to 90%.I like the optimistic note in the article that good side to this is that such stability due to less volatility and less speculation may lure new users into buying Bitcoin.

Quote from: Crypviser on January 25, 2017, 10:32:37 PM
Not good
What? It is exactly the oposite. It is the best news we can have. Enough of this fake margin trading with borrowed money. It was not speculating anymore, what Chinese leverage traders used to do was pure gambling.Now we can finally see that volume of their exachanges is not different from western markets!I hope it will bring us era of slow price progression without occasional dramatic dumps caused by margin traders panic.

Quote from: Crypviser on January 25, 2017, 10:32:37 PM
Not good
What? It is exactly the oposite. It is the best news we can have. Enough of this fake margin trading with borrowed money. It was not speculating anymore, what Chinese leverage traders used to do was pure gambling.Now we can finally see that volume of their exachanges is not different from western markets!I hope it will bring us era of slow price progression without occasional dramatic dumps caused by margin traders panic.

I agree with your view, now the real progress we can see , real means now the rise of bitcoin price will be solely due to its real function getting success, and slow rise is also good as now more online merchants can take bitcoin as their payment as their wont be much fluctuation in the price and stable price is good.

Haha maybe he meant demonized Arvydas77, Decentralization has nothing to do with volumes or governments. Bitcoin is already decentralized and you can’t decentralize it more. The only thing this inspectors could do is to close the exchanges in China, which would affect the price but not bitcoin itself.

so if the data is fake, i wonder how much total bitcoin number that have been mining and how much bitcoin in number which already distributes in the market. with many of fake data, is there any correction for the total bitcoin number? i am curious with the data and i want to know more.

Quote from: ethereumhunter on January 28, 2017, 06:01:08 AM
so if the data is fake, i wonder how much total bitcoin number that have been mining and how much bitcoin in number which already distributes in the market. with many of fake data, is there any correction for the total bitcoin number? i am curious with the data and i want to know more.

Bitcoin supply doesn’t depend on trading volume. Don’t be confused. Bitcoin mined are 16,129,887 (as I write). They can’t be more than that: they could be less for a variety of reason (lost keys, compromised wallets, coins burnt etc.) Bitcoin mined are equal to the available supply but consider that exchanges treat your coins differently and therefore, after what happened in China recently, we will not see fake volumes for a while.

Ok, well, who has seen this become reality? Bit-X has more 24H volume than BTCC, OKCoin and Huobi! It still amazes me how their volumes dropped from millions every day to just a few thousand right now. It’s just unreal how low these exchanges have been sinking with their volumes. It was a big hoax it seems….http://bitcoinity.org/markets/list

Quote from: richardsNY on January 28, 2017, 09:29:36 PM
Ok, well, who has seen this become reality? Bit-X has more 24H volume than BTCC, OKCoin and Huobi! It still amazes me how their volumes dropped from millions every day to just a few thousand right now. It’s just unreal how low these exchanges have been sinking with their volumes. It was a big hoax it seems….http://bitcoinity.org/markets/list

At this point the markets are fairly calm, so I am more interested in finding out how their volumes will be when the market gets active again. If these Chinese exchanges are still lagging behind, then it’s obvious that we have been fooled even harder than we could imagine with their fake volumes. Poloniex is having a fairly calm day, and that exchange generated +15,000BTC in volumes last 24 hours. But let’s not get too hard on them as the Chinese new year might play an important role as well. But one thing is sure, I like current stability a lot. I wouldn’t mind seeing this stability last for a few more weeks.